People or profit: What is the best system to regulate drug prices?

This article investigates the role state healthcare institutions play in negotiating drug prices, and what steps can be taken for a more mutually beneficial relationship to exist between pharmaceutical companies and governments when it comes to the pricing of drug products.

Drug sales make up a large proportion of the revenue and profits of the pharmaceutical industry. The US dominates the pharmaceutical market in terms of consuming and producing drugs, with prescription drug spending set to hit $600 billion by 2023, up from an estimated $500 billion in 2019.

One of the biggest banes to a pharmaceutical company’s drug profits is state healthcare systems that negotiate drug prices to an affordable level for the public. The NHS is one of the most prominent state healthcare systems that has strict criteria in both accepting new treatments and negotiating prices. In England and Wales, it does this through the National Institute for Care Excellence (NICE).

On the opposite side of the spectrum is the US market, which is not hindered by a state institution limiting prices. Once a patent is secured, the government has no say in how much a company can charge for the product. While the US does have some institutions to negotiate prices with drug companies, like the United States Department…